Tuesday, March 02, 1999

3/2/99: Amazon.com, Ingram, Pearson, NYTimes,

Publishing News: March 2, 1999Amazon.com SalesIngramHearstPearsonNew York Times Co. to Buy Interest in TheStreet.comEBook Standards MeetingBook Point of Sale InformationCambridge University Titles On DemandReader's Digest Outlines Growth StrategyAdobe Systems Introduces Next Generation of Page-Layout SoftwareLangenscheidt Acquires Hammond BrandMirror Group

Amazon.com SalesAmazon.com’s sales grew to $610MM from $147MM and are now at an annual run rate over a Billion dollars according to company executives. The net loss for the period was $124MM vs $31MM last year. Since last year, not only has Amazon.com continued to explosively sell books but the company has added CD’s and videos to the mix. Additionally, the company also expanded into Germany and the UK during the same period. Sales in ‘expansion’ areas accounted for 25% of total fourth quarter sales. Company President Jeff Bezos confirmed his company’s plans to aggressively invest in the business even more than they had in the past which will no doubt translate into continued operating losses for the company.Source: Publishers Weekly, 2/1/99

IngramYoungSuk Chi has been promoted to COO of the Ingram Book Group and will report to Mike Lovett the President and CEO of the Ingram Book GroupSource: Publishers’ Weekly 1/25/99

HearstHearst Book Group which includes Avon, Hearst, Morrow and at least 21 other imprints saw sales surpass $200MM according to Publishers’ Weekly. During the year Hearst had six titles on the best seller lists and also saw increases in back list sales.Source: Publishers’ Weekly 1/25/99

PearsonPearson Education announced an agreement with Versaware Technologies to convert textbooks into electronic form. Apparently, Versaware has developed a system that reduces the time and expense of convertion into a variety of formats. Versaware is also denying that it is about to be purchased by Barnes and Noble although they admit to a number of discussions on strategic partnerships.Publisher’s Weekly 2/15/99

New York Times Co. to Buy Interest in TheStreet.com New York Times Co. said it will pay $15 million in cash and services for a minority equity stake in TheStreet.com, an online provider of financial and investment news and commentary.Simultaneously, Michael Golden, vice chairman of New York Times Co., was nominated to serve on TheStreet.com's board. New York Times Co. also said it was discussing opportunities for strategic alliances with TheStreet.com.Source: The Wall Street Journal 02/23/99

EBook Standards MeetingThe Open Book Standards committee met to review a draft for proposed standard file formats based on SGML and XML for electronic book devices. The meeting was hosted jointly by eBook manufacturers Softbook Press and Nuvo Media. The current specifications are open to review (as an evaluator) for comment and review. It is expected that the specifications will be published to the public sometime in the next three months.Source: Publisher’s Weekly 2/15/99

Book Point of Sale InformationPublishing Solutions Inc., a White Plains N.Y. company announced it is has agreed with Barnes & Noble and Penguin Putnam to pilot a book POS system. This system is designed to track and forecast book sales at the retail level. As the results become known the company plans to expand the system to a wider group of retailers.Source: Publishers’ Weekly 2/15/99

Cambridge University Titles On DemandLightling Press the Ingram affiliated on demand printer announced that they have joined with Cambridge University Press (CUP) to offer a number of CUP titles on demand. Initially Lightning will offer 113 titles, however if all goes well up to 500 additional titles may be added to the selection. CUP has chosen recently discontinued titles which are still receiving orders and company sources commented that their current order fulfillment system keeps track of orders for out of print titles. Lightning Press now has over 1800 titles in it’s digital library which can be printed in lots as low as one unit.Source: Publisher’s Weekly 2/15/99

Reader's Digest Outlines Growth Strategy Thomas O. Ryder, chairman and CEO of The Reader's Digest Association, Inc. today outlined a five-point growth strategy for the company in a speech to financial analysts and company employees. The key elements of the growth strategy include: - Dramatically expanding the company's presence in five targeted areas of intense consumer interest -- home, health, family, finance and faith -- that offer high growth potential and suit the company's brand. - Selling products and services beyond publishing that fit with the Reader's Digest brand in the five targeted areas, initially focusing on health and financial services. - Continuing geographic expansion, by entering new countries and expanding offerings in countries where the company already has a presence. - Developing new channels -- including direct response TV and non-sweepstakes mail -- to market existing and new products and services. - Making the Internet an integral part of all the company's business by investing in high quality website development, enhancing current sites and creating new ones.In the call Ryder also spoke of efforts – to date largely successful – to reduce monetize assets and that these had produced over $300MM. This money together with an additional investment pool of $100MM would be used to fund the above investment activities. There will be a concentration on the internet as a mechanism to extend their strength in direct response. There was no mention of the proposed deal/joint venture with Time Life. The companies may still be discussing some consolidation but it remains to be seen if anything comes of it.Source: Businesswire 2/25/99

Adobe Systems Introduces Next Generation of Page-Layout SoftwareAdobe Systems introduced the vaunted ‘Quark Killer’ application this week in Boston. The desk top publishing package named InDesign was previewed six months ago under the name K2 and is based on a new open object oriented architecture that is highly extensible. With the introduction of InDesign, Adobe is aggressively taking on Quark’s core market in desk top publishing software; however with over 70% market share in key publishing and advertising markets Adobe will face an up hill battle convincing production managers and designers to make the switch. There are a number of advantages however to making the switch – number one is you don’t have to deal with Quark’s renowned cavalier attitude to customer service as well as their errant product migration strategy. Additionally, Adobe’s other products are mainstays in publishing and advertising offices and InDesign has been developed to work seamlessly with Photoshop, Illustrator and Acrobat. Quark does not interface with these products which has caused process silos and inefficiencies. A flexible, fully digital workflow is, according to Terry Rosen, director of information technology at Ogilvy & Mather New York, essential for companies looking to succeed in a global market, where concepts and materials have to be shared effortlessly across thousands of miles. "Adobe InDesign delivers a truly integrated creative tool kit. The software offers a familiar interface and the same approach to page layout and design as Photoshop and Illustrator, which means our art directors and studio artists can hit the ground running with it. With InDesign, we can also output ads directly to PDF for review, approval, and transmission. It's this type of unified workflow that lets us move ideas to production faster, and better support our clients worldwide," said Rosen.Quarks’ reaction to the news was muted – although they have yet to announce a strategy for the current generation of products.Source: Businesswire 3/2/99

Langenscheidt Acquires Hammond Brand Hammon Inc, a US based map and cartography publisher has been purchased by German based Langenscheidt Publishers, Inc. The 98-year old Hammond, celebrated for its old world tradition of cartography, has enjoyed a reputation in recent years for its advances in mapmaking technology. In 1992, it published the world's first completely digitized world atlas: The Hammond Atlas of the World. This atlas garnered awards for graphics, accuracy and innovation, as did its most recent edition, published in 1998, which pioneered computer-generated tints depicting land elevations and ocean depths. Terms were not disclosed.Source: Businesswire 3/2/99

Mirror GroupThe Mirror Group rejected the most recent offer from regional UK publisher Trinity. The last bid valued the company at approximately $1.5Bill. The combination of stock and cash was insufficient in the view of the board and additional bids are expected. Mirror group has faced turmoil over the past several months regarding it’s future. David Montgomery the Mirror CEO was removed by the board recently in a board room shake up and the company is now being run by a temporary CEO. Since the living large days of Bob Maxwell (was he pushed?) the company has fought to recover it’s once UK market dominance while at the same time managing the debt imposed by Maxwell’s unique style of financial accounting. Maxwell if you recall stripped the pension funds of this operation to ‘plug the leaks’ (pun very much intended) in his rapidly sinking business empire. Many of those pensioners were required to return to work.Source: NYT 3/2/99

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Michael Cairns

Michael Cairns has served as CEO and President of several technology and content-centric business supporting global media publishers, retailers and service providers. He can be reached at michael.cairns@outlook.com and is interested in executive management and consulting, board and/or advisory positions. I am currently Managing Director with Digital Prism Advisors where we advise clients on digital and business transformation.

My career spans a wide range of publishing and information products, services and B2B categories and my operating and consulting experience has largely been with brand-name companies such as PriceWaterhouseCoopers, Macmillan, Inc., Berlitz International, AARP, R.R. Bowker and Wolters Kluwer.

I have served as a board member of the Association of American Publishers (AAP), the Book Industry Study Group (BISG) and in addition to my responsibilities at R.R. Bowker, l also served as Chairman of the International ISBN Executive Committee.